UK Insurance: FCA (14 March 2017)

OAC Digest
FCA, Governance, risk & compliance, Investments, Life insurance, Non-Life, SIMR

14 March 2017

Selected recent UK news items of more general interest: 

On 10 March, the FCA published Guidance Consultation - GC17/1: Changes to the way firms calculate redress for unsuitable defined benefit pension transfers. This consultation is open until 10 June 2017 and the FCA will issue a response in the autumn. OAC is currently reviewing the changes that are outlined in this paper and proposes to respond to the consultation in due course.

In her speech "Making choices in uncertain times" of 9 March, Mary Starks spoke of work to clarify the FCA's competition remit. The Director of Competition at the FCA views the regulator as "promoters and enablers of competition in financial services and enforcers of competition law" and "competition [as]... a complement to regulation." In concluding, the Director said they will publish the final report on the asset management market in the summer having "found competition is not working particularly well in the UK’s asset management market and is not driving value as hard as [the FCA] might want."

On 7 March, the FCA marked the first anniversary of the implementation of the Senior Managers and Certification Regime (SMCR). New rules regarding regulatory references for Senior Managers and staff in the Certification Regime came into force on this date and it was the deadline for firms to have issued certificates. The Conduct Rules apply to all other staff from 7 March. The regulator announced "[the extension of the SMCR to all sectors of the financial services industry including insurers]... will be clear, simple and proportionate. During Q2 of this year we will be consulting widely with industry, firms and consumers on our proposals. We expect implementation to begin from 2018." The FCA noted "strong progress in relation to firms adopting a culture of individual accountability through their implementation of the regime."

On 6 March, the FCA published CP17/7: Insurance Distribution Directive (IDD) Implementation - the first of two consultation papers setting out proposals for implementing the IDD. The IDD covers the initial authorisation, passporting arrangements, ongoing regulatory requirements for intermediaries, organisational and conduct of business requirements for insurers, product oversight and governance and enhanced conduct rules for insurance-based investment products (IBIPs). The FCA requests responses to the consultation by 5 June 2017.  

On 3 March, the FCA announced that "Investment managers [are] still failing to ensure effective oversight of best execution" and "Firms continue to fail to meet [FCA's] expectations on their use of dealing commission." The regulator said that most investment managers failed to take on board the findings of their previously published work.  

 

David Gray

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David Gray
Consultant Actuary

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